China’s Dalian commodity exchange excludes iron ore from fee waivers

BEIJING/SINGAPORE (Reuters) – China’s Dalian Commodity Exchange (DCE) has excluded iron ore, coking coal and coke from its latest waivers on commission fees, according to traders and a state-backed media report, a move market players say could be aimed at reining in speculation.

The exchange said on Friday it would waive or reduce some commission fees market participants incur in executing transactions and other processes from Jan. 9 to the end of the year, without specifying the products affected.

The DCE on Monday sent out another notice to members saying the waiver will exclude iron ore, coking coal and coke futures, according to one futures broker who received the notice and a report by a news agency associated with state-owned newspaper Securities Times.

The waiver has a general rule of reducing transaction fees for futures and options by 30%, according to the trader and the report.

The DCE did not immediately reply to a Reuters request for comment.

“The exclusion of iron ore might aim to avoid a drastic price volatility and rein in speculation on iron ore and other products,” said the trader, who required anonymity due to the sensitivity of the matter.

Prices of iron ore, a key steelmaking ingredient, have been relatively volatile, with the most-traded futures contract on the DCE rising 50% to its high for last year of 998.5 yuan ($139.47) a metric ton on Nov. 23 from the year’s low of 665.5 yuan a ton on May 26.

The DCE typically curbs overheated speculation through raising margin requirements and transaction fees, and limiting positions.

Other bourses in China including the Zhengzhou Commodity Exchange, Shanghai Futures Exchange and Guangzhou Futures Exchange have also issued statements since Friday waiving and reducing commission fees.

That has been widely interpreted by analysts as a move to lower the cost of participation in the derivatives markets.

($1 = 7.1591 Chinese yuan)

(Reporting by Amy Lv in Beijing and Muyu Xu in Singapore; Editing by Jan Harvey)